Yesterday was a monster session, paced by the usual suspects, but strong enough that even Consumer Staples (XLP) eked out a small gain. After stumbling at the end of July, the market has alternated between advancing and declining, but upside bias has carried it to a new record close.

CPI Report & Implications

The headlines were pathetic as usual, with a singular focus on connecting the dots to Trump’s tariff war, instead of highlighting the most critical messaging from the report. Headline inflation whiffed. Core inflation exceeded consensus, primarily due to service costs rather than goods. On that score, the pop in airline fees stood out big time.

Market Reaction

I’ve always found the Consumer Price Index (CPI) report helpful in identifying industries with pricing power.

It's not a coincidence that airline fees surged, and the number one percentage gainer in the session was United Airlines (UAL).

It was a monster session that saw 71 names, up more than 3%. Only five stocks achieved that milestone on Monday.

The action is filtering down to smaller names with market caps under $100.0 billion.

Thus, 79% of the S&P 500 (SPX) finished in the green.

Rate Cuts and Small-Caps

The chance of the Fed cutting rates next month leaped to 95%. This is excellent news for the small-caps, which caught a big bid yesterday.

The Russell 2000 ETF (IWM) had its best day against the S&P 500 since November 6^th, 2024 (the day after the election).

Today’s Session

The list of names that initially seemed good or great, based on earnings, now includes CoreWeave, Inc. (CRWV).

We sent an alert more than an hour before closing, indicating we were taking massive profits in the Hotline model portfolio.  

But this is not an indictment of the company. The stock will be much higher in the future, but the market is choppy, and many investors are getting whipsawed.  This is especially true for those who missed the big move off the April lows and now want to make up for lost time and ground.

It doesn’t work that way. 

Meanwhile, the names hammered make for a great watchlist:

• The Trade Desk, Inc. (TTD)
• Fortinet, Inc. (FTNT)
• Fair Isaac Corporation (FICO)
• Crocs, Inc. (CROX)
• Novo Nordisk (NVO)
• Root, Inc. (ROOT)
• CoreWeave, Inc. (CRWV)

Comments

Charles is always spot on about the "quality" of the news and its focus on the wrong things. Everyone needs to go beyond reading the headlines to "auditing" the news. We are entering the golden age. Mike Mayone on 8/13/2025 10:09:48 AM

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